(15-10-2012, 03:02 PM)CityFarmer Wrote: [ -> ] (15-10-2012, 12:04 PM)freedom Wrote: [ -> ]my concern is more about the percentage of debt in its capital structure, rather than whether it can service its debt. As a current shareholder of Starhub, which one do you concern more? DEBT/EBITDA or other leverage ratio? of course, our assumption is Starhub is not a going concern and its price is supported by its dividend.
Of course, FCF is important, but here we are talking about leverage and how high leverage is affecting Starhub's dividend sustainability all other things being equal including FCF, aren't we?
Correct me if I am wrong. debt is a big decision whether dividend is sustainable. If everything else is equal, higher debt definitely will weaken the dividend sustainability.
I am not a shareholder of Starhub, but i am shareholder of another telco (M1). Which one do I concern more? I already mentioned in my previous posting, debt/EBITDA 
IMO, Debt/EBITDA is a better indicator vs debt/Equity for telco business model
The concern of debt service or dividend payout capability will ultimately lies on earning power (i.e. ability to generate cash). One company with gearing of 100% (debt/equity = 1) but earning power of 50%, Another company with gearing of 10% (debt/equity = 0.1) but earning power of 5%, which one do you think it's dividend payout is more sustainable? 
if you compare apple to orange, there is never going to be a conclusion.
also, from your above point, I don't see how DEBT/EBITDA is really relevant, more like only FCF is relevant.
that's why I stress before everything else being equal. otherwise, how to conclude?
(15-10-2012, 04:19 PM)freedom Wrote: [ -> ]if you compare apple to orange, there is never going to be a conclusion.
also, from your above point, I don't see how DEBT/EBITDA is really relevant, more like only FCF is relevant.
that's why I stress before everything else being equal. otherwise, how to conclude?
I chose debt/ebitda as proxy of FCF, since it is readily available in AR. It is definitely better than debt/equity which is also readily available from various reports.
(15-10-2012, 04:55 PM)CityFarmer Wrote: [ -> ] (15-10-2012, 04:19 PM)freedom Wrote: [ -> ]if you compare apple to orange, there is never going to be a conclusion.
also, from your above point, I don't see how DEBT/EBITDA is really relevant, more like only FCF is relevant.
that's why I stress before everything else being equal. otherwise, how to conclude?
I chose debt/ebitda as proxy of FCF, since it is readily available in AR. It is definitely better than debt/equity which is also readily available from various reports.
it is better only if you are a creditor.
as a shareholder, there are much more to look at.
"Thailand's three biggest telecoms operators bid a total of 41.63 billion baht ($1.7 billion) on Tuesday for the radio frequencies required for the introduction of faster third-generation mobile services. Market leader Advanced Info Service, which is 21% owned by
SingTel, offered a combined 14.63 billion baht ($581 million) for three slots with the highest price put at 4.95 billion baht." - The Edge Singapore
http://www.theedgesingapore.com/the-dail...-olam.html
(17-10-2012, 12:10 PM)CityFarmer Wrote: [ -> ]"Thailand's three biggest telecoms operators bid a total of 41.63 billion baht ($1.7 billion) on Tuesday for the radio frequencies required for the introduction of faster third-generation mobile services. Market leader Advanced Info Service, which is 21% owned by SingTel, offered a combined 14.63 billion baht ($581 million) for three slots with the highest price put at 4.95 billion baht." - The Edge Singapore
http://www.theedgesingapore.com/the-dail...-olam.html
SGX Annc - they won the auction, subject to fulfilling some conditions within 90 days.
(19-10-2012, 05:27 PM)KopiKat Wrote: [ -> ] (17-10-2012, 12:10 PM)CityFarmer Wrote: [ -> ]"Thailand's three biggest telecoms operators bid a total of 41.63 billion baht ($1.7 billion) on Tuesday for the radio frequencies required for the introduction of faster third-generation mobile services. Market leader Advanced Info Service, which is 21% owned by SingTel, offered a combined 14.63 billion baht ($581 million) for three slots with the highest price put at 4.95 billion baht." - The Edge Singapore
http://www.theedgesingapore.com/the-dail...-olam.html
SGX Annc - they won the auction, subject to fulfilling some conditions within 90 days.
Further issue in the pipeline
Thai finance ministry calls for 3G auction probe
http://www.channelnewsasia.com/stories/a...84/1/.html
(20-10-2012, 11:15 PM)CityFarmer Wrote: [ -> ] (19-10-2012, 05:27 PM)KopiKat Wrote: [ -> ] (17-10-2012, 12:10 PM)CityFarmer Wrote: [ -> ]"Thailand's three biggest telecoms operators bid a total of 41.63 billion baht ($1.7 billion) on Tuesday for the radio frequencies required for the introduction of faster third-generation mobile services. Market leader Advanced Info Service, which is 21% owned by SingTel, offered a combined 14.63 billion baht ($581 million) for three slots with the highest price put at 4.95 billion baht." - The Edge Singapore
http://www.theedgesingapore.com/the-dail...-olam.html
SGX Annc - they won the auction, subject to fulfilling some conditions within 90 days.
Further issue in the pipeline
Thai finance ministry calls for 3G auction probe
http://www.channelnewsasia.com/stories/a...84/1/.html
3 blocks each, 3 bidders, sounds more like common sense or good biz sense to bid at the minimum reserve price.... Collusion? Sounds more like the ministry in charge of the auction was either expecting more bidders or had not done their due diligence....
In a Poly market and where jobs move between gov and private on governance and business, will happens everywhere. Is just less obvious in developed countries but nevertheless same. Not saying is unethical but probably practical way of life. Can you imagine what will happen if one telco do not have a block ?
Singtel 2Q result is out. Kim Eng report rated it as "SELL" with TP adjusted to $3.00 (from previous $3.03)
Performance quoted from the report
"2QFY3/13 results missed the consensus but were inline with our forecast, which was lower than the street by 2.5%. Underlying net profit was flat YoY at SGD886m (up 4% QoQ) while revenue performance was flat YoY/QoQ at SGD4574m. EBITDA rose 1%/2% YoY/QoQ. Profitability was dragged down by start-up losses in Singapore from newly-acquired Amobee, Optus continued to be hit by lower mobile termination rates, while Bharti disappointed"
The future outlook quoted from the report
"SingTel now expects group revenue to decline in the low single digits (from low single growth), driven by revised-down expectations in Australia, mainly the consumer side. Optus is facing the brunt of lower mobile termination rates, as well as intense price competition amidst a slowing economy, not a good combination. In Singapore, start-up losses from acquisitions are expected to continue eating into profits. We also expect margins in the current quarter to be affected by iPhone 5 related subsidy costs."
Singtel is traded @ PE between 12-13 now, which is lower than the average PE of telecom stocks
(vested)